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Archive for the ‘D2’ Category

The Grauniad asked 21 of its opinion writers to make predictions for 2009. As a service, and to force Daniel Davies’ hand into starting his planned Predictions-L mailing list, I’ve shorterised each one and reflected briefly on it. The full texts are here.

1) Jackie Ashley thinks the Lib Dems may be powerbrokers in a hung parliament.

Comment: not so much a prediction as a statement that the polls currently look like that. But at least it’s based on data.

2) Michael Tomasky thinks e-books will be a major hit, but nobody wants to read 80,000 words cos of wikipedia and google an stuff.

Comment: This is one of those issues that kills forecasters. The dawn of e-books has been repeatedly predicted and repredicted without happening. Tomasky makes the good point that the Amazon Kindle is selling well…but then his New Yorker/smartass kulturpessimismus conwis kicks in and he ends up predicting that e-books will sell hugely but nobody will buy them. Quack, quack, oops.

3) Gary Younge thinks industrial relations in the US will be troubled as the recession takes hold.

Comment: Fair enough.

4) Oh Jesus, here we go. Madeleine Bunting thinks the recession will teach us all a lesson about the Virtues of Thrift.

Comment: Mr Keynes, call your office. More specifically, this is so woolly that it’s impossible to think of criteria that would let us determine the success or failure of the prediction. In fact, she explictly backs out of it by suggesting there will be a “confusion of values”. Yellow.

5) Peter Preston thinks we will see better satire on TV, and a UK network will recruit John Oliver from the Daily Show.

Comment: Is/Ought confusion – not clear whether Preston thinks this *will* happen or whether he’s hoping to encourage it. Hard to define “better”, but if better satire on TV does happen there will probably be a degree of consensus that it has happened.

6) George Monbiot thinks some mate of his will have a big success with this fillum they made.

Comment: Well, it’ll be either a hit or a turkey. Nobody knows anything (and the kid stays in the picture). It’s a prediction, even if the film about climate change is characterised by “a Nigerian fisherwoman who has to wash her catch with Omo”; climate change does not cause oil spills, nor vice versa. Not in Nigeria, at least. I know about that pipeline in Alaska.

Comment: There’s a bit of hedge in how you define “the agenda” here, but it’s fair enough. And she’s based it on data. Tim Worstall probably already has accused her of hoping for the flooding of New York City, and is now probably guiltily masturbating over her byline photo. And that’s a prediction!

8 ) Jonathan Freedland thinks there could be a hung parliament, and a Lib-Lab coalition, or maybe a Lib-Con coalition. Or it might not happen.

Comment: I am not joking. Perhaps a drop too much of the Old Tory’s Arse 76-year old malt this Christmas. But we could treat this as a forecast that there will be at least one major medical achievement in this line in 2009, and that way it is fair enough.

10) John Harris thinks there will or should be a national debate that’s something to do with sub-post offices.

Comment: Jesus wept, what a bunch of wank. I remember when he was good; he was especially good mocking the Big Conversation, strange to relate. This sounds like his balls just dropped off. Absolutely no testable claims. FAIL.

11) Jonathan Steele thinks Russian influence will increase in Georgia and the Ukraine. And there will probably be a change of government in Thailand, but it won’t matter.

Comment: I was tempted to say Jonathan Steele thinks…whatever the Russians tell him to. Note that back in 2004 he thought the Ukrainian revolution was an evil fascist plot because Yulia Timoshenko made a pile in the gas business. Now she’s “a figure to watch in 2009, a controversial and vastly rich entrepreneur who takes a more respectful line towards Moscow”. Prediction: Steele will continue to follow the Party line and will continue to be invited on all-expenses trips to Moscow (indispensable pdf). And he’s hedging about Thailand like Capability Brown with a Black & Decker and a liberal dose of amphetamine sulphate. However, at least he made a testable prediction.

12) Jenni Russell thinks there may be something wrong with race relations in South Africa.

Comment: No shit, Sherlock.

13) Hugh Muir thinks various European politicians will do something or maybe not, and some UKIP MEPs may be re-elected. Or then again they may not. Who knows?

Comment: Hugh Muir may make a testable prediction he could be held responsible for. Or perhaps he won’t.

14) Tim Garton Ash thinks there will be a youth protest wave, driven by graduate unemployment.

Comment: A testable, nonobvious prediction based on a quantitative model. Score one for Agent Romeo.

15) Julian Glover thinks “the age of depoliticised power will come to an end”.

Comment: I think he means things like independent central banks. It’s not at all clear though. Still, chalk it up; if the ECB gives up monetarism by December, he’s right.

16) Libby Brooks thinks “the gardener who knows how to grow their own carrots” will be valued more than a hedge fund manager, and the success of Mamma Mia! is an example of a profound change in our views of status.

Comment: I think there is more than a little contradiction here, and not just because nobody ever liked hedgies anyway. Again, vague puffology about abstract nouns.

17) Seamus Milne thinks the “the neoliberal model is collapsing around our ears, but what is going to replace it is still up for grabs”.

Comment: Not a prediction, and unfalsifiable. If you read on, it turns out the old tankie really means “maybe this crisis is the one! world revolution is here!” but he’s wily enough to realise everyone will laugh if he says that.

18) Mark Lawson thinks William Golding’s books will come back into fashion.

Comment: God, I hope not. But at least it’s a prediction.

19) Scraping the barrel. Zoe Williams thinks that the idea of prime-time TV is obsolete, and that TV will be dominated by crowd-pleasing repeats.

20) Martin Kettle, for it is he, thinks the extreme Right in Europe will win more seats at the European Parliamentary elections. He doesn’t think this means a third world war is imminent, but he does not have “high confidence” of this.

Comment: Kettle, Kettle. The boy’s so prone, Ron. Trust him to make a fool of himself. I would think anything less than very high confidence that the radical right will not start a world war from Europe would be front-page news, but he actually buries this behind the shattering suggestion that the BNP might pick up an MEP or two.

Of course, that’s actually quite unlikely because the method of election favours parties with a small but widespread support base like the Greens, rather than ones with sporadic, concentrated support like the BNP.

21) Marina Hyde thinks the Russian state will continue to take control over more of the Russian economy, but will re-privatise in the future, only to re-expropriate a new set of temporary oligarchs when the next crisis arrives. And the Government will fail to get newly state-owned bank branches to open on Saturday mornings.

Comment: That’s actually a very good point. Two very good points, in fact. We have a winner!

Yes, and his running mate is so far behind, she thinks bloggers are pajama-clad basement-dwellers.

Here’s the real issue, though; the guy who’s hammering them for not knowing anything about the Internet’s best argument is that the other side have a huge pile of e-mail addresses. Luntz is thinking in terms of 1990s hard-right campaigning – blast-faxing, talk radio, direct mail, robocalls. We need to collect more e-mail addresses so we can spam them with talking points, beg for money, and push out plausibly deniable scare stories they can circulate. We’ll club them to death with our spam.

In short, Movement X adapted very quickly and effectively to the multichannel television revolution.. but its competitors have caught up, its advantage has diminished, and it is not likely to ever again enjoy the TV advantage it had in the past. Information overload, intense competition and fragmentation, and the increasingly aggressive counter-ideology campaigns all stand in the way.

What about internet forums? Such forums allowed X to circumvent editors by posting videos and statements directly to forums where all news producers could pick them up directly – and once anybody, however obscure, ran with it the others were sure to follow. Beyond that, though, they were not really useful for mass audiences, who were unlikely to find their way to the forums, whether or not they were password protected. Instead, they were ‘semi-public spheres’ where those already committed to the identity could download materials and engage in arguments about tactics and strategy and doctrine. The forums built group cohesion, boosting morale and strengthening identity – and offering recruiters a pool of potentials.

But forums also had problems. Their audience was limited to those already at the second or even third stage of mobilization. The doctrinal arguments on the forums tended to reward the most doctrinaire at the expense of the pragmatists, arguably driving X’s doctrine even farther from the mainstream. Sometimes, the debates could undermine morale or turn into open dissent, to the dismay of movement leaders.

You’ll probably have guessed by now that Movement X is actually Al-Qa’ida. I suppressed it in this post and made a couple of small changes so as to point up the astonishing similarities. You may also notice that the last paragraph is a case of the Daniel Davies theory of Internet counter-mobilisation. But I found this bit especially interesting:

This could potentially strengthen the ‘organization’ part… but at the expense of a greater distance from the pool of potential recruits who would not be sufficiently trusted to join. Overall it’s hard to see how AQ could adapt social networking without creating such vulnerabilities. Its rivals, on the other hand, have no such problems – Muslim Brotherhood youth are all over Facebook.

This is a special case of a general trend. Are we not seeing a structural shift away from the elite model of political organising – neoconservatives and Al-Qa’ida International, as opposed to its local franchises – towards something else we haven’t quite defined yet, like the Obama campaign, the European Union, and Hezbollah? In the first, it’s all about message discipline, ideological purity, and entryism. You seek inner purity in order to contaminate the others. In the second, it’s almost as if you’re aiming to be subverted yourself.

I disagree; this form of terrorism has a special feature, in that it not only has the ability to make use of these people, but in fact it actually wants them. All they need is one self-defeating burst of dramatic childish rage. Stupidity and ego histrionics are actually qualifications, if the job you’re recruiting for is “meat guidance package for our expensive explosives”. Given that the person concerned doesn’t need to live independently or make any decisions – in fact, you want to prevent them doing either, as this has a negative impact on mission success – the people you need are precisely the ones who wouldn’t make acceptable infantrymen in an army of any kind. (Middle-class wankers tend to believe this includes them; history suggests they can hack it.)

No, what you want are the ones the sergeant would break his heart over. From the point of view of a harassed, super-minority movement with a small supply of capable people and resources of every kind – this is actually how Osama sees the world jihad, according to his statement With a Band of Knights – what would you do? You need to preserve bombmakers, recruiters, and competent conspirators; the answer is a cadre system, where they recruit, supply, fit out, and target a steady flow of rubes. In Iraq, recruiting angry young Saudis through this system has the further benefit that, like third-rate Formula One racers, they pay the team for the drive.

The IRG post is about one of India’s many longrunning small-scale insurgencies; they reacted to a government strategy of targeting their leaders by recruiting the poor, or rather the marginal half-bright younger sons of the poor, to do the dirty work. The lads who got the shit job tended to be young, illiterate, and involved at the fringes of criminal gangs. Poverty of every kind is still the motivator. The answer is clear – tack to the left. Counterinsurgency is just the respectable form of Marx.

In my last “there will be no war with Iran” post, I asked if there were any other indicators I ought to be watching. Having given it some thought, I have indeed been looking at some others; for a start, I would expect that before such a strike the US Government’s Strategic Petroleum Reserve would be well in line for some filling. Who knows what might happen? Better to stockpile early and often. If they were especially keen, they might also be chartering oil tankers, possibly to use them as floating storage.

There are also some financial indicators. Specifically, I would expect the issuance of Treasury bills to rise sharply in advance of any such event; as they are bank reserve assets, banks can lend against them and also discount them with the central bank. Therefore, if there was an expectation of possible crisis, it would make sense to substitute T-bills for government bonds, thus topping up banking sector liquidity and also building up the government’s cash balances.

So how are they looking? Well, I looked up the SPR figures, and I was a little surprised to see that there was no sign of faster filling before the Iraq war; far from it. The stockpile was filled significantly in 2003-2004, and reached a peak of 700 million barrels in the summer of 2005 before being drawn on after Hurricane Katrina. Since January 2006 it’s been gradually restocked; it should pass the 2005 value any minute now. But there is no sign of unusual haste.

What about the financials? Well, the US Treasury website wouldn’t let me get at the stats, but our superior technology rendered their crude oppression meaningless. You can get the data here; if they’ll let you. Otherwise you’ll have to use an SSL-based pr*xy, which is just what I did. If you look at page 7 of the charts for August, 2007 (the latest), there’s an interesting comparison between the same quarters in different years. The figures have a strong seasonal variation, due to the financial year; the third quarter always sees a big reduction in T-bill issuance.

But it does look as if the period from October 2002 to June 2003 saw a swing from bonds to T-bills, and from long maturities to short. Also, the summer and autumn of 1990 saw a sudden lift in the percentage of bills as opposed to bonds in issue, which was considerably greater than the year before or after; as did the autumn of 2001 (page 10 of the document). We’re currently seeing quite the opposite; even taking the seasonality into account, US bills are being withdrawn and refinanced with bonds. Of course, there are other factors that affect this, specifically monetary policy and the yield curve.

I would like to understand the current controversy going on over at many more-read blogs than this one regarding “orthodox” and “heterodox” economics. At least, I’d like to understand it better. I’m sympathetic to a general critique of what we’re apparently obliged to describe as “orthodox” economics – unrealistic standard assumptions, unrealistic views of rationality, fetish maths, ponyism – but I am, to say the least, very unclear on how “heterodox” differs from either a) just good economics, b) J.K. Galbraith, or c) critical theorist blethering.

No doubt this is unfair, but there are so many strawmen being bayonetted in this debate that I thought I might find time for a spot of close-order drill myself. Also, I was frightened by Post-Autistic Economists as a child – well, as an exchange student at Vienna University in the autumn of 2001, which is much the same. The PAEs were highly popular there, for reasons which usually added up to “no more quantitative methods class! Woo! And you’re a fascist.”

If you think that’s unfair, well, it wasn’t me. More recently, I followed a lunk to the Robert Vienneau blog and his critique of comparative advantage. Now, I’m not sure whether the problem was like the dog listening to music – I’m not bright enough to understand it – like the man listening to music through a pile of socks – the exposition clouded the clear, not the other way round – or whether it actually is what it seemed to me to be. That being a weird corner case strongly at variance with history, and based on assumptions even odder than neoclassical ones.

Curiously, this weekend I was talking to a Canadian writer about Social Credit among other things, and it struck me that historically you’re more likely to be crazy if you think you’ve discovered a new economic principle than if you think you’ve discovered a new law of physics, so I think my scepticism is justified.

So, can anyone show me where to reswitch the Light on, the Provisional Truth, and the Path-Dependent Way? This is basically a great big wolf-whistle to Dsquared, naturally.

There seems to be an increasing belief around that we’re still in Iraq because the UK/USA leaders can’t bring themselves to book a loss, as Ezra Klein puts it over at Tapped. David Kurtz at TPM argues similarly that Bush thinks the only way the US can be defeated is if it chooses to leave Iraq. He blames this on Henry Kissinger, which if true is wildly out of character, and compares the situation to that of a very wealthy man who owns a lossmaking business – he can, if he so chooses, keep covering the loss from his own funds, and he might convince himself that the business will eventually succeed if he just hangs on long enough.

Back in February, the mighty Chris Dillow made some interesting comments about Iraq and sunk costs. Chris pointed out that in some circumstances, the sunk-cost fallacy might be rational – for example, “staying the course” in Iraq might signal determination to our enemies, or on the other hand, worrying about the 2,800 dead soldiers might be an effective way of signalling to oneself that decisions have consequences.

Victor Davis Hanson is apparently peddling the first of these two arguments, which should tell us something. After all, as I think Dsquared says, past performance *is* a guide to future performance when it comes to individuals. VDH’s point – that fighting on in Iraq might shore up our deterrent credibility – could be sensible, if it wasn’t for the continuing costs. Our enemies can be expected to measure us by capability as well as intention. Whilst the US Army and Marine Corps are mired in Iraq, the US (and the UK) has little substrategic deterrent credibility, to say nothing of the financial cost. It will take time to restore the fabric of the army after the war, too. And, vitally, any cost-benefit analysis has to take into account the risk that things will get much worse – that we will get a serious kicking. The danger of this is rising steadily: Sadrists seize the TV station, this after last week’s insurgent reconnaissance-in-force of the Health Ministry, which is just over the bridge from the Green Zone, the car bomb inside the Zone on Monday, and the Sadr City massacre. (Did you know they think the bomb was made inside the Zone?)

But, it seems, the mindset is that as long as it’s not formally signed off as a loss, it don’t exist. Enron used to do this. As the end of the quarter approached, by which time they needed to publish results showing steady profits growth to satisfy the stock market, there would be a frantic review of contracts. If a deal was dead, then the costs involved would have to be booked that quarter. But if there was the slightest hope, or at least someone was willing to sign their name to saying there was the slightest hope, of it eventually completing, then it didn’t need to be accounted for then. Mark-to-market accounting meant that anything that was profitable (or rather, was predicted to be profitable) would be accounted for at the first possible moment – hey presto, stellar results.

But, of course, the toxic waste didn’t go away, and the very real costs involved were, well, real – although they could be temporarily kept out of the profit and loss accounting, they consumed actual cash from the cash flow, just as Iraq has real consequences that aren’t dependent on whether or not we accept them. When I last reread Bethany McLean and Peter Elkin’s The Smartest Guys in the Room, one thing leapt out at me: Enron’s culture neatly prefigured the last six years. It wasn’t just that it was a scandal associated with George Bush, but the culture of it was identical. The same dominant narrative (Enron is a roaring success/GWB’s policy is a roaring success) flogged, despite flying in the face of publicly available facts, to the public with the help of uncritical intermediate institutions (Wall Street and Andersens/the New York Times) and the demonisation of critics (Skilling’s bully rhetoric and manipulation/the troll industry), the same unpleasant language of sexual violence people on LGF and Free Republic are addicted to, the delusions held together for internal consumption by groupthink and mutual reinforcement, and of course the corruption.

Also, the fundamental incompetence at everything but propaganda. Rumsfeld’s DOD couldn’t find enough body armour, Enron Energy Services couldn’t issue accurate bills to its customers or even cash their cheques. Bush didn’t know there was a difference between Shi’ites and Sunnis, Enron Broadband thought you could transfer spare capacity between physically separate DSL lines without using a backhoe. If you haven’t read it yet, you’d better. The denial, too – there is still a lobby that Enron was really a good business, just as John Hinderaker still claims to think Iraq isn’t really more dangerous than Washington DC. Well, if all those marked-to-market contracts from 1991 to 2001 really had been profitable, Enron would have had more than $500 million net cashflow less trading collateral and trades with self in 2000, as the already-booked profits arrived as cashflow.

D2’s post on statis (it’s the new change) and crap government IT brought something to mind. Dan mentions the success of the Bank of England-run Crest settlement system for the London Stock Exchange, contrasted with the hellbroth of disaster the NHS National Programme for IT is descending into. One thing I think he should have mentioned, but didn’t, is the role of institutional memory.

He correctly points out that managerial stupidity loves the idea of change and the notion that past history is no guide. Very true. But one of the worst things about this is that the accumulated knowledge in an organisation is also irrelevant. In his example, the Bank profited from its experience – you didn’t see any Big Consultants in that post – and succeeded.

On the NHS IT project, the failures so far are iSoft, which illustrates the fallacy of thinking that dynamic young start-ups necessarily know anything, and Accenture, which illustrates the fallacy of thinking that management consultants know anything. The only sections successfully delivered are those being built by BT, which has been doing big networks and big databases for donkeys’ years and working with the public sector for as long. It’s possible BT’s job was easier. They did the so-called national spine (some fine distinction between a spine and a backbone network..), which is essentially a big VPN deployment over their MPLS network and some data centres. So far, so cookbook engineering. But BT also has one of the much more complicated regional integrator contracts, and none other than the London Region one. That hasn’t gone to ratshit yet, as far as I know, so they must be doing something right.

Similarly, the disaster that was Railtrack had a lot to do with listening to people other than the people who knew what they were talking about. The BR engineering department was asked to piss off out of the West Coast Main Line project so consultants could prepare cost estimates more congenial to the government, and then the consultants were asked to work out how to run the company (bang goes the BR operations department). They turned out to be as wrong as they could possibly be.

IBM turned up the old documentation from the days of modular mainframes when they designed the first Bladeservers. Some engineers on the project remembered them.

So Dave from PR’s got a vlog, then. Well, that’s only realistically going to be crap, isn’t it? It almost amounts to a definition of blogging that, if you issue a press release to the nationals before you start, that’s not it.

May I recommend, instead, one of many fine British blogs? Daniel “Dsquared” Davies on the disease of Crap Government IT, managerialism, and statis (it’s the new change). The Ministry on John Reid, Tony Blair and the word “radical”. Forceful and Moderate on the desperately shit nature of jobcentres – why do they have computers in them that are guaranteed not to have access to the majority of job adverts, and why should you be forced to use them?

Any one of these is certain to beat Dave’s efforts, and might even make you think. And if that happens to you, you’ll just have to read Chris Dillow.

So Dave from PR’s got a vlog, then. Well, that’s only realistically going to be crap, isn’t it? It almost amounts to a definition of blogging that, if you issue a press release to the nationals before you start, that’s not it.

May I recommend, instead, one of many fine British blogs? Daniel “Dsquared” Davies on the disease of Crap Government IT, managerialism, and statis (it’s the new change). The Ministry on John Reid, Tony Blair and the word “radical”. Forceful and Moderate on the desperately shit nature of jobcentres – why do they have computers in them that are guaranteed not to have access to the majority of job adverts, and why should you be forced to use them?

Any one of these is certain to beat Dave’s efforts, and might even make you think. And if that happens to you, you’ll just have to read Chris Dillow.